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Consumer Financial Protection Bureau Has 2 Bosses Claiming Control 2 Bosses Show Up to Lead the Consumer Financial Protection Bureau
(about 5 hours later)
WASHINGTON — On Monday, Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, brought in doughnuts. Around the same time, Leandra English, the agency’s other acting director, sent an all-staff email thanking employees for their service. WASHINGTON — On Monday, Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, brought in doughnuts for employees. Around the same time, Leandra English, the agency’s other acting director, sent an all-staff email thanking the work force for its service.
Awkward.Awkward.
And so it goes in a capital city defined by its dysfunction, at an agency where two public servants, one a holdover from the Obama administration and another a rushed temporary appointee by President Trump, are messily and publicly vying to lead a controversial agency under constant political assault by Republicans. Ties between the Trump White House and the federal government’s top consumer financial watchdog agency were so frayed by the end of Thanksgiving weekend that hundreds of confused employees came to work not knowing who their director would be. And so unfolded another frenetic workday in this corner of a capital city defined by hyperpartisan dysfunction: Two public servants — one a holdover from the Obama administration, the other a rushed temporary appointee by President Trump — messily and publicly vied to lead an agency that has fought for consumers while under political assault by Republicans. Its future as an independent agency rests on who leads it next.
“I knew on Friday who my boss was,” an employee for the agency, who only gave his first name, Ella, because he was not authorized to speak to reporters, said as he approached the bureau. “But thanks to this idiot, I don’t know.” By the end of the day, a federal judge was assigned to hear Ms. English’s request, filed late Sunday, to provide an emergency restraining order to block the president from appointing Mr. Mulvaney. Judge Timothy J. Kelly of the Federal District Court in Washington, who was nominated by Mr. Trump and confirmed in September, was perhaps the only person in the capital who refrained from rushing to issue an opinion.
(He did not clarify which idiot.) At a hurriedly called and packed-to-the-gills hearing, Judge Kelly voiced his concerns, noting that lawyers for the president could not definitively say whether Ms. English was protected from losing her job. The judge also said that neither set of attorneys had addressed whether Mr. Mulvaney, who is also the director of the White House Office of Management and Budget, “can wear two hats.”
The bureaucratic roller coaster began with the abrupt departure on Friday of Richard Cordray, an Obama appointee who helped the agency aggressively expand its powers to punish rule-breaking companies. He named Ms. English as his acting deputy director and presumed acting director. The White House responded forcefully by saying Mr. Mulvaney, currently the director of the Office of Management and Budget, would be the one in control until Mr. Trump decided on a permanent successor, whose confirmation could take months. Yet the judge remarked that he was essentially being asked by Deepak Gupta, Ms. English’s lawyer, to overrule the president’s power to appoint a new director.
On Sunday evening, Ms. English filed a lawsuit against Mr. Trump in an attempt to block him from appointing Mr. Mulvaney, who is named in the lawsuit as “claiming to be acting director” of the agency. “That’s an extraordinary remedy,” Judge Kelly said, before asking Mr. Trump’s lawyers to respond to Ms. English’s complaint with their own brief by the end of the evening.
As confusion reigned, Ms. English headed to Capitol Hill to meet with at least four lawmakers about her plans. Among those lawmakers: Senator Chuck Schumer, the Democratic leader, and Senator Elizabeth Warren, the Democrat of Massachusetts who proposed the bureau and helped set it up, according to a spokeswoman for Ms. Warren. Others, like Senator Elizabeth Warren, Democrat of Massachusetts, reiterated that the bureau was meant to be independent from political influence. She defended Ms. English as the rightful director of the bureau that has helped nearly 30 million American consumers collect almost $12 billion in refunds and canceled debts.
Mr. Mulvaney, for his part, dodged questions from consumer finance advocates as he carried in breakfast for at least a few employees on the 1,600-person payroll. There was no public trace of Ms. English, whose tenure as a low-profile public servant abruptly ended as she began to fight on behalf of the agency she helped found in 2011. Mr. Mulvaney has been openly critical of the agency, once calling it a “joke” and a “wonderful example of how a bureaucracy will function if it has no accountability to anybody.” “The agency was built to be as far away from partisan politics as humanely possible — including exactly what Donald Trump is doing now,” said Ms. Warren, who proposed the bureau in 2007 while a Harvard Law School professor.
The two dueling directors embody widely differing visions regarding the future of the agency, which was established under the 2010 Dodd-Frank Act and adopted an aggressive agenda under the Obama administration, targeting financial companies for practices that it considers unfair or abusive. Those actions have resulted in nearly 30 million consumers collecting almost $12 billion in refunds and canceled debts. “The DNA of this agency is to work for America’s families and to stand up to big Wall Street banks,” Ms. Warren said in an interview. “Mick Mulvaney wants to work for Wall Street banks and step on American families.”
Barney Frank, a former representative from Massachusetts who was a co-sponsor of the Dodd-Frank Act, said that the law intended for the acting director to step into any vacancy, to protect the agency from political influence. It was the latest hill on a bureaucratic roller coaster that began with the abrupt departure on Friday of Richard Cordray, an Obama appointee who helped the agency aggressively expand its powers to punish rule-breaking companies. Mr. Cordray named Ms. English as his acting deputy director and presumed acting director. The White House responded forcefully by saying Mr. Mulvaney would be in control until Mr. Trump decided on a permanent successor, whose confirmation could take months.
“Bank regulation is a very sensitive business,” Mr. Frank said in an interview on Monday. “You don’t want to expose the agency doing it to the normal political interference, which is what we were afraid of.” On Sunday evening, Ms. English filed a lawsuit against Mr. Trump and Mr. Mulvaney, who is named in the lawsuit as “claiming to be acting director” of the agency.
Republicans have long said the agency has overreached. Mr. Trump publicly offered his thoughts on the agency’s performance over the weekend: “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” he wrote on Twitter on Saturday. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!” As confusion reigned, Ms. English’s tenure as a low-profile public servant abruptly ended as she fought to remain at the agency she helped lead since its opening in 2011. She headed to Capitol Hill to meet with Ms. Warren and Senator Chuck Schumer of New York, the Democratic leader, among other lawmakers about her plans.
Sarah Huckabee Sanders, the White House press secretary, commented on the disarray: “It is unfortunate that Mr. Cordray decided to put his political ambition above the interests of consumers with this stunt,” she said in a statement. “Director Mulvaney will bring a more serious and professional approach to running the C.F.P.B.” Mr. Mulvaney, for his part, dodged questions from consumer finance advocates as he carried in breakfast for at least a few employees on the 1,600-person payroll. Mr. Mulvaney has been openly critical of the agency, once calling it a “joke” and a “wonderful example of how a bureaucracy will function if it has no accountability to anybody.”
Ms. Sanders also cited a memo sent by Mary E. McLeod, the consumer bureau’s general counsel, who said she had found an opinion by the Justice Department’s Office of Legal Counsel written Saturday in support of Mr. Mulvaney’s appointment under the Vacancies Reform Act “on point and persuasive.” The two dueling directors embody widely differing visions regarding the future of the agency. Established under the 2010 Dodd-Frank Act and adopting an aggressive agenda under the Obama administration, the Consumer Financial Protection Bureau targets financial companies for practices that it considers unfair or abusive.
“I advise all bureau personnel to act consistently with the understanding that Director Mulvaney is the acting director of the C.F.P.B.,” Ms. McLeod wrote. Barney Frank, a former Democratic representative from Massachusetts who helped write the overarching law, said it intended to have the acting director fill any vacancy to protect the agency from political influence.
Still, the bureaucratic Ping-Pong continued on Monday as the morning progressed. Mr. Mulvaney sent a memo to employees, asking them to “please disregard any instructions you receive from Ms. English in her presumed capacity as Acting Director.” “Bank regulation is a very sensitive business,” Mr. Frank said Monday in an interview. “You don’t want to expose the agency doing it to the normal political interference, which is what we were afraid of.”
“If you receive additional communications from her today in any form, related in any way to the function of her actual or presumed official duties (i.e. not personal), please inform the General Counsel.” Republicans have long said the agency has overreached. On Saturday, Mr. Trump publicly offered his thoughts on the agency’s performance. “The Consumer Financial Protection Bureau, or CFPB, has been a total disaster as run by the previous Administrations pick,” he wrote on Twitter. “Financial Institutions have been devastated and unable to properly serve the public. We will bring it back to life!”
The Trump administration maintains that the Federal Vacancies Reform Act, which was signed into law in 1998, gives the White House authority to appoint its own replacement. On Monday, the White House doubled down.
“We’re aware that a lawsuit has been filed,” said Sarah Huckabee Sanders, the White House press secretary, “but we’re also aware that the law is extremely clear and that Director Mulvaney is the acting director here.”
She said the legality of his appointment was confirmed by the White House counsel’s office, the Justice Department and the agency’s own general counsel, who was appointed by Mr. Cordray.
“So I think that everybody is in full agreement that he’s the director of this office,” Ms. Sanders said.
But attorneys observing the case said that the legal issue of whether the Dodd-Frank Act or the Federal Vacancies Reform Act would prevail is hard to immediately untangle.
Judge Kelly was formerly the chief counsel for Senator Charles E. Grassley, Republican of Iowa and the chairman of the Senate Judiciary Committee. Before that, he spent a decade as a federal prosecutor in Washington.
Carl W. Tobias, a professor at the University of Richmond School of Law who studies federal judicial selection, said Judge Kelly’s tenure in Washington has probably left him familiar with “interbranch disputes.”
“On the president’s side,” Mr. Tobias said, “you can say that the Vacancies Reform Act should govern.” Ms. English’s camp, on the other hand, could argue that thrust of Dodd-Frank was to create “a lot of insulation” for the agency to be truly politically independent, he said.
Quyen Truong, a former assistant director and deputy general counsel at the bureau, predicted a likely protracted legal battle, even if Judge Kelly ultimately denied Ms. English’s request to at least temporarily keep Mr. Mulvaney from running the agency.
“Given the matter is being heard by a judge recently appointed by President Trump — and the standard for granting a temporary restraining order is high and difficult to meet — I think the judge will most likely deny the temporary restraining order,” she said.
Back at the agency, the bureaucratic Ping-Pong continued as the legal wrangling progressed. Mr. Mulvaney sent a memo to employees, asking them to “please disregard any instructions you receive from Ms. English in her presumed capacity as acting director.”
“If you receive additional communications from her today in any form, related in any way to the function of her actual or presumed official duties (i.e. not personal), please inform the general counsel.”
He also instructed staff to say hello and grab a doughnut. On Monday, inquiries from journalists who contacted the agency’s spokeswoman were referred to Mr. Mulvaney’s spokesman, which suggested employees were heeding his requests.He also instructed staff to say hello and grab a doughnut. On Monday, inquiries from journalists who contacted the agency’s spokeswoman were referred to Mr. Mulvaney’s spokesman, which suggested employees were heeding his requests.
In her own email, sent to the entire staff about a half-hour after Mr. Mulvaney arrived for work, Ms. English expressed her gratitude: “It is an honor to work with all of you,” she wrote.In her own email, sent to the entire staff about a half-hour after Mr. Mulvaney arrived for work, Ms. English expressed her gratitude: “It is an honor to work with all of you,” she wrote.
They both signed off as Acting Director. They both signed off as acting director. For the night, at least, they both were.